EARNINGS / Alliance Energy reports results for Year
Attention Business/Financial Editors:
Alliance Energy Inc.(Alberta Stock Exchange trading symbol "AEI")is pleased
to provide the following information to its shareholders with respect to the
financial results for the year ended November 30, 1997.
Summary:
1997 1996 Change
Gross production revenue 2,774,504 2,188,004 27%
Operating expenses 1,082,190 959,597 13%
General and administrative expense 129,618 262,424 (51%)
Funds from operations 1,126,073 495,887 127%
Net Earnings (Loss) 293,729 (89,064)
Funds from operations per share $0.09 $0.06
Net Earnings per Share $0.02 ($0.01)
Production volume (BOE) 127,297 100,208 27%
BOE/D 349 275 27%
Capital Expenditure 4,170,191 3,579,259 16%
Shares outstanding at year end 14,002,583 9,615,361 46%
Total production volume increased by 27% from 1996 as a result of drilling
success. More importantly, most of the drilling occurred in the fourth
quarter, therefore, the production volume and revenue increase also occurred
in the fourth quarter. The production rate at year end was 300 BOE/d for 1996
compared to an exit rate of 650 BOE/d for 1997. Medium oil accounts for 74%
of production volume, heavy oil accounts for 19% and gas accounts for 7%.
There has been no change in price on a BOE basis.
The reduction in operating expenses and general and administrative expenses
on a BOE basis and the increased production revenues has resulted in the cash
flow for the year being increased by 127% to $1,126,073 compared to $495,887
for 1996.
During the first quarter of 1998 the company drilled a second horizontal well
(50% W.I.) in the Lost Horse Hills area. The well was put on production at
the end of January and is currently producing at a steady 520 BOPD (260 BOPD
net) with a 30% water cut. The first Lost Horse Hills horizontal well is
currently producing 440 BOPD after reaching payout in November 1997 with its
first 60 days of production.
The company has also shut-in most of its heavy oil wells in January reducing
production by 100 BOPD. These wells will be put back on production when the
oil price recovers. Currently the company is producing 750 BOE/d with a
monthly cash flow of $240,000 at the current oil price.
The drilling company which is partly owned and operated by Alliance has now
2 drilling rigs working in SE Saskatchewan and the 3rd rig will start work
around the Edmonton area by the end of February 1998.
The company has plans to drill two more horizontal wells in Lost Horse Hills
and several exploration and development wells in SE Saskatchewan after spring
break up with its own drilling rigs. The company's goal is to triple its
production rate in 1998.
The information is provided by the management of the Company and neither The
Alberta Stock Exchange or The Alberta Securities Commission has approved or
disapproved this information.
For further information: Paul Cheung, President, Alliance Energy Inc.,
(403) 263-6220. |
